Question2 a) You have the following information for Yoman Inc. liabilities at fi

Question

Question2 a) You have the following information for Yoman Inc. liabilities at fiscal year end Dec. 31, (30 marks) 2017 reported (in S thousands). S 000 s) $ 746394 Long-term debt 000s $ 560,000 Accounts payable + Accrued liabilities Payroll tax expensev Income taxes payable* Notes Payable, 3-month Other Information "Long-term debt is the balance of a 6-year, 45% pa. installment loan. Xoman 60,475» 10,480 122,184 20,350 18.850- Unearned revenue 1,566"Dividends payablee 25,427 Accumulated Depreciation 145,065» Interest Payablee borrowed S840 million on March 30, 2015. Equal installments and interest are due annually on April 1 each year Required i) Prepare the liabilities section of Yoman's statement of financial position. ii) How much of the total interest payable (S20,350) relates to the installment loan?- Question 2 (cont)-' b) Operating Line of Credit o What is an operating line of credit? Briefly explain how it benefits a firm. o How does a firm account for an operating line of credit? o Why is information about a firms line of credit important to investors?

Explanation / Answer

As per the chegg's policy I am allowed to answer only the first question so please don't mind and ask other questions separately.

A) Liabilities:

Current Liabilities -

Accounts Payable = 74639

Accrued Liabilities = 18450.

Income tax payable = 25427

Notes payable = 145065

Unearned revenue = 60475

Dividends payable = 10480

Interest Payable = 20350

Total current liabilities = 354886

Long term liabilities = 560000

Total liabilities = 914886

B) Interest from loan = 0.045*560000 = 25200

So, all of the interest Payable may relate to this loan

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